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Flood-ravaged Louisiana can’t pay the $3.7 billion that the U.S. government says is its share of hurricane relief, a spokeswoman for Gov. Kathleen Blanco said Thursday (Nov. 3)
“You can’t squeeze $3.7 billion out of this state to pay this bill. Period. That would be difficult for us on a good day,” the spokeswoman, Denise Bottcher, told USA TODAY.
Staffers for the governor “about fell over” Wednesday night when they received the Federal Emergency Management Agency’s (FEMA) estimate of the state’s costs for hurricanes Katrina and Rita, said Mark Merritt, a consultant working for Blanco.
FEMA projects that it will spend a total of $41.4 billion in Louisiana, about $9,000 per resident. Federal law requires state and local governments to pay a portion of disaster relief costs. That share can be as much as 25%. The $3.7 billion estimate is roughly 9% of FEMA’s projected costs in Louisiana.
The $3.7 billion represents just under half of the $8 billion the state spends per year and comes as the extensive flooding around New Orleans has severely undercut tax revenue. The state is in the midst of heavy cost-cutting to whittle down a projected $1 billion shortfall.
Congress would have to enact legislation to forgive Louisiana’s debt, FEMA spokeswoman Nicol Andrews said. President Bush has waived certain state and local costs, such as debris removal, but he is bound by law to collect the $3.7 billion from Louisiana, she said.
Mississippi and Texas, also hit hard by this year’s hurricanes, have not received FEMA’s projected costs.
The bulk of the money Louisiana must pay will go toward paying for personal property lost in the storms. FEMA pays up to $26,200 per household for uninsured losses. Blanco’s office estimates that 60,000 households in New Orleans and St. Bernard Parish alone will qualify for the payments. FEMA this week began notifying people that they will receive money.
Merritt said the scope of the disaster far exceeded anything envisioned when the relief agency was created. He called the costs “astronomically unprecedented.”